Several questions in this problem set are based on the 8/19/12 Wall Street Journal article "Cartel Pushes Up Price of Rubber." This article is at the end of the module on Antitrust Policy. Try to read the entire article carefully first... and then see if you can answer the questions (rather than fishing out the answer each time). Obviously you will go back and check to make sure you have it correct ... but to absorb the content it is best read it all first before going back.
In what ways is TopGlove responding?
A. They are on the verge of bankruptcy and are looking for buyers. B. Stopping production of rubber-based products and diversifying into plastics. C. Raising prices to consumers and investing in its own rubber plantation D. Keeping prices constant (which means lower profits) so as to not lose consumers
Several questions in this problem set are based on the 8/19/12 Wall Street Journal article "Cartel Pushes Up Price of Rubber." This article is at the end of the module on Antitrust Policy. Try to read the entire article carefully first... and then see if you can answer the questions (rather than fishing out the answer each time). Obviously you will go back and check to make sure you have it correct ... but to absorb the content it is best read it all first before going back.
In what ways is TopGlove responding?
| A. | They are on the verge of bankruptcy and are looking for buyers. | |
| B. | Stopping production of rubber-based products and diversifying into plastics. | |
| C. | Raising prices to consumers and investing in its own rubber plantation | |
| D. | Keeping prices constant (which means lower profits) so as to not lose consumers |
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Related questions
A few questions in this problem set are based on the comments made by James Love to Congress regarding antitrust policy and the Petroleum industry. These are found at the end of the module on Antitrust Policy. Try to read the entire article carefully first... and then see if you can answer the questions (rather than fishing out the answer each time). Obviously you will go back and check to make sure you have it correct ... but to absorb the content it is best read it all first before going back.
What is it about the petroleum industry that simultaneoulsy prevents entry and fosters joint ventures and other collaberations?
| A. | High fixed (and sunk) costs | |
| B. | All of these are mentioned and significant | |
| C. | The high dependence on patent holding by those already in the industry | |
| D. | The licensing requirments prior to entering |
